Bahrain-based Arab Insurance Group (Arig) has announced that its appeal to recover amounts due from Saudi Arabian insurer, Al-Rajhi Company for Cooperative Insurance (Al Rajhi Takaful), has been successful in the final hearing before the Committee of Appeal of the Insurance Disputes and Violations Committee (IDVC) in Riyadh.
The committee annulled the decision of the First Instance Committee in the case brought by Arig against Al Rajhi Takaful, the defendant.
“As per the final judgment issued in favour of Arig on 8 February 2024, Al Rajhi Takaful was ordered to pay Arig an amount equivalent to SAR25.44m ($6.8m),” Arig said in a statement to the Bahrain Bourse.
It said, “Any amounts collected after expenses shall be booked as profits.”
The dispute is over a portion of insurance premiums in the contractual relationship that began in 2015 between Arig, as the reinsurer, and Al Rajhi Takaful, as the insured. The former had not received insurance premiums from the insured related to extended warranty insurance on insured policies, for which ARIG provided reinsurance, according to a statement to the Saudi Exchange lodged on 28 March 2024 by Al-Rajhi Takaful.
The insurer said Arig filed a lawsuit against Al Rajhi Takaful with the IDVC, because of the disagreement between them regarding the amount due from the Saudi insurer.
Arig demanded an amount of SAR33.2m with the quantum including unpaid insurance premiums as set out by Arig. However, Al Rajhi Takaful only recognised a sum payable of SAR15.8m.
In 2024, the final decision was issued by the IDVC Appeal Committee which ordered Al Rajhi Takaful to pay SAR25.4m to Arig, including accounting fees.
Al Rajhi Takaful said that it had taken all necessary steps to secure its position since the lawsuit started. M